Even though your business may have been formed and registered, it’s possible that it doesn’t yet have an IRS EIN. An IRS EIN is an identification number that’s used by the IRS to track your business on a federal level. Applying for an EIN is a separate process from legally registering your business. Here’s everything you need to know about how to apply for an EIN online.
Steps to completing the IRS EIN Application:
- Prepare Business Owner Information
- Apply for an EIN Number Online
- Apply for an EIN Number by Phone, Mail or Fax
- Why Do I Need to Obtain an IRS EIN Number?
- How Do I Get an EIN Number?
- What is the Difference Between an FEIN Number and an EIN?
Depending on the way your company is structured, you may have one owner, a few partners, or a large number of owners. Regardless, you’re going to need to prepare business owner information before you apply for an EIN.
Acquire information about:
- The business and its structure. Is it an S-Corporation, C-Corporation or Partnership? What industry is it in?
- The business owners and partners. Who is a stakeholder in the business? What percentage do they own?
- The responsible party. The individual responsible for filing for the EIN will need to give their own information, such as their ITIN.
Once you have the above information, you can begin the quick process of applying for an EIN number online.
The process of applying for an EIN number online is simple:
- Collect your business owner information and business documentation.
- Submit your information to an EIN number service.
- Receive your EIN number online within an hour.
There are many advantages to using an EIN number service. They will handle the process for you, ensuring that it’s done correctly.
If you’d rather talk directly to a representative, you can instead apply for an EIN Number by phone. You will be walked through the process, asked qualifying questions, and receive your EIN number at the end of the phone call. The downside to this method is that you’ll need to call during business hours, and it may take a few hours for everything to be processed.
If you’d rather have a paper copy of your EIN in hand, you can mail in a copy of the EIN application form. While this is just as easy as filling out an online application, it will take up to six weeks for you to receive your EIN. If you need to fill out any paperwork with your EIN during that time, you’ll need to delay it. Also, if there are any problems with processing, it may take even longer.
Finally, if you have a fax machine, you can fax in your paper copy of the EIN application form rather than submitting it online. While it’s fast to submit the form, it may take a few business days to receive a reply. When your EIN number does come, it will be faxed back to your fax machine address. If you don’t have a fax machine, you might not receive your number.
All of the above options will get you an EIN number eventually, but only one option will get you an EIN number in an hour: the online application process.
- To pay employees. You can’t fill out hiring paperwork, pay employees, or pay payroll taxes without an IRS EIN Number. You could face some strict fines and penalties related to underpayment of payroll taxes if you delay getting your IRS EIN.
- To open bank accounts. While you can open a bank account in your own name without an EIN, you cannot open a business bank account without an EIN. The same goes for business loans and business credit cards.
- To apply for permits. If you need city permits for events, liquor sales, or wholesaling, your EIN Number will be used to identify your company.
- To get a business lease. Unless you’re going to be personally guaranteeing your business lease, most landlords will request information regarding your business entity during the process of leasing.
- To pay federal taxes. Your federal business taxes will fall under an EIN unless you are a sole proprietorship. Even if you are a sole proprietorship, you’ll still need an EIN for hiring.
- To establish business credit. Just like your SSN is used for individual credit, your EIN is used for business credit.
An EIN Number can be acquired through an online tax ID service. To get an EIN, you’ll submit some basic information about your business and its ownership. In addition to this, you’ll provide information about who to contact if there are any questions. In order to acquire an EIN number, the individual applying for one needs to have a valid SSN or ITIN themselves.
If you aren’t interested in online processing, it’s possible to mail in a form, fax in a form, or request an EIN over the phone. However, these options tend to take longer than the online process.
What is the difference between an FEIN Number and an EIN? With countless references to numbers of all types, a business owner may get confused. Luckily there’s a very simple answer to this: They reference the exact same number. A business has a nine-digit long federal ID number that registers them with the IRS.
On payroll and employment reports, this is usually called a Federal Employer Identification Number (FEIN) or an Employer Identification Number (EIN). On tax related reports, this is usually called a Taxpayer Identification Number (TIN). Regardless, it’s all the same thing, just used in different ways.
Applying for an EIN online is one of the first steps that you’ll need to take to register your business and start your company’s operations. You can get an EIN online in under an hour and start signing up for bank accounts and paying taxes immediately.